“Does Price Really Matter?”

A Conversation with

Sushanta Das
Founder and CEO
Retail Labs

​Thorsten Merkle
Professor of Hospitality and Service Management
Zurich University of Applied Sciences

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​Variations on the street pricing model have been a basic tenet of the current concessions business framework for nearly 40 years. And the topic has been controversial for nearly 40 years! Even today, many years later, it is still a topic of conversation: just a couple months ago, USA Today ran a story about airport prices.

But are these conversations about the right topic? After all, our collective goal is not managing prices but maximizing passenger satisfaction. What if price is simply not that important a factor in passenger satisfaction? This is the question Sushanta Das, Thorsten Merkle, and Satheesh Seenivasan (Associate Professor of Marketing at Monash University in Melbourne, Australia) answer in a recently published academic research paper.
 
The study's most significant finding challenges long-held industry assumptions about passenger price sensitivity in airport environments. Contrary to traditional beliefs that travelers are highly price-sensitive when “captive” in airport terminals, the research found passengers were primarily driven by non-price factors including service and product quality, menu variety, hospitality and ambiance, and brand appeal. This suggests that perceived value – rather than absolute price – is the key determinant of passenger satisfaction and purchasing decisions.
 
Simply put … It’s not the price. It’s the value! The total package is key to satisfaction. Consider these three key takeaways:
 

1. Price sensitivity is overstated. Price mentions in passenger reviews remained statistically unchanged from before to after Phoenix Sky Harbor’s pricing deregulation in 2019.
2. Perceived value matters more than absolute price. Travelers evaluate pricing through the lens of perceived value, meaning they’re willing to pay more when they feel the experience justifies the cost, similar to other hospitality and travel industry segments.
3. Context Matters. The study stresses the need for airport operators and concessionaires to adopt a diverse strategy that caters to different passenger needs and contexts, rather than a one-size-fits-all approach. 

These are just three takeaways. Throughout our conversation, Sushanta and Thorsten offers much to think about. I encourage you to watch, listen to, or read our interesting and informative conversation at the following links:

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MEET OUR GUESTS
​

Sushanta Das
Founder and CEO
Retail Labs
 
Sushanta Das drives travel F&B and travel retail innovation to create tomorrow. He is the Founder and CEO of tRetail Labs. Sushanta is one of the very few people globally with a comprehensive understanding of operational travel retail / travel F&B / tourism along with an expanded knowledge of the AI/ Digital Transformation domain. He has more than 28 years of experience in retail operations, business strategy, consumer-inspired creative thinking and AI / Digitalization.
 
Experiences
 
AI & Digital Transformation roles

• Strategic partner to the C suite, BOD’s, and Executive teams leading, developing, and driving company strategy to maximize revenue & margin, enhance profitability, and grow market share.
• Expert in developing travel retail and travel F&B digital transformation by leveraging and enhancing key metrics and initiatives such as average transaction values, conversion enhancement, new business opportunities, and AI & Data Analytics.

 
Retail Strategy, Operations & Travel Retail Business Development on a Global scale

• Retail Formats: Travel Retail, Hypermarket, Supermarket, Watches, Apparel, Lifestyle.
• Retail Models: Dealer, Distribution, Franchise, COCO / FOCO / COFO / DODO Models.
• Retail Roles: AI & Digital, Proit Center / Operational Head, Process Improvement, L&D, Finance & Accounting,
• Business Development, Product & Innovation, Sales.
• Airport Bids: HK, Singapore, SFO, Mumbai, Abu Dhabi, Muscat, Jeddah/Riyadh, Beirut, Bali, Hawaii

 
Sushanta holds an MBA in Luxury Brand Management from ESSEC Business School (France) and a Master of Science of Business AI at New York University (USA).

​

Thorsten Merkle
Professor of Hospitality and Service Management
Zurich University of Applied Sciences
 
Professor Merkle combines academic and business skills to shape the future of food service. He is Head of the Hospitality Management Research Group at Zurich University of Applied Sciences. Holding a PhD in Business and Management and an MBA in General Management, Thorsten seamlessly bridges the gap between academic research and real-world business practice. His ability to translate research findings into actionable strategies makes him a sought-after expert in the field.
 
With deep expertise in Food Service and a particular focus on Airport F&B Concessions, Thorsten’s research provides valuable insights into consumer behavior in the unique airside environment.
 
Experiences
 
Food Service-related roles

• Managing Director for a subsidiary of the Wöllhaf Group (Airport Concessionaire), Stuttgart & Shanghai
• Strategy Development for LSG Sky Chefs Lounge GmbH, Frankfurt
• Senior Manager Catering & Guest Services, MATCH Hospitality, 2010 FIFA World Cup, Johannesburg
• Catering Manager, 2006 FIFA World Cup Organizing Committee, Frankfurt
• Global Head of Quality for all Facility Services, Dussmann Group, Berlin

 
Academic Leadership roles

• César Ritz Colleges Switzerland, Module Leader (Brig)
• University of Applied Sciences of the Grisons, Director of Studies in Tourism & Service Design (Chur)
• Zurich University of Applied Sciences, Head of Hospitality Management Research Group (Zurich)

 
Beyond academia, Thorsten’s passion for aviation extends into his personal life — he serves as a part-time flight instructor in the scenic alpine region of Valais, further deepening his connection to the aviation industry.